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2013 Hotlist Results – Week 19

Written by HUB May 13, 2013

Week 19 of 2013

Not much to report – the markets continue to break records, setting new highs on S&P and DOW while the FTSE still has some room left to attempt its own record breaking run at 7000 level. Most would not argue with the latter achieving that milestone as the markets continue to see QE cash sloshing in with no immediate signs of that disappearing.

The question for resource focussed investors is when will the sector bottom out and see some interest. It’s like being invited to the QE3 party only to find you’ve missed the fizzy stuff and are left with the flat warm beer.

M&Q and transformational discoveries are the two hero’s that can save the sector. With many commodity stocks trading at levels last seen when OIL was priced at $35 per barrel – one has to expect the bigger fish to seize the valuation gap opportunity as OIL shows little signs of dropping significantly below $90.

The Dow closed week 19 up 146pts at 15119. The FTSE 100 added 103pts to close the week at 6625. That’s the second week on the trot that the FTSE has put in a 100 point + weekly gain.

A virtual portfolio has been set up using the 2012 final trading day close figures as a starting point and £1000 has been invested in each stock. This does not include buying fees or stamp duty and is purely intended to be used as a benchmark or summary for each week. One newspaper top ten picks for 2013 has been included to help monitor/compare against. A pi ‘polled’ top picks list (from LSE bulletin boards) has been included this year.

Week 19 stock picks summary:

The trend continues to play out whereby larger cap lower risk stocks out perform the smaller cap higher risk stocks. The resource sector has been battered for the last 3 years with some minor bounces along the way. But nothing major has been delivered since the late rally of 2010.

Major discoveries or those ‘transformational’ results have been lacking. And M&A activity unusually quiet considering the discounted prices. COVE was the highlight last year after the company finally succumbed to a bid which saw it’s sp rise from 90p to test 270p in a matter of weeks/months as a bidding war ensued. Shell were the major that lost out on that one – but the fact that they were bidding reveals quite a bit. Big oil is on the look out for bargains. Why wouldn’t they? Africa is hot in demand and with companies like Bowleven notching up further transformational results in 2013 to add to tbose in previous years – a bid surely cannot be far away?

The destiny of Kurdistan focussed stocks took a big step forwards to commercialisation after the KRG passed an OIL Law within its own constitution to export oil without Baghdad’s approval. This legal paper work appears to be the precursor to an inevitable major business deal with Turkey. A deadline of circa July appears to have been tabled suggesting that Baghdad has 90 days at best to find a compromise or deal that suits themselves but mostly the Kurds. The door is still open but relations are growing apart as the KRG begins a new era of international exports. Hence – it is not surprising to see Turkish founded Genel in demand when the rest of the sector is on ignore. Genel’s sp has risen from 600p to test 920p last week. That said – the disconnect between Genel and another Kurdistan focussed stock ‘GKP” couldn’t be bigger.

Whilst GKP clearly has an important Court hearing judgement coming up – the market appears to be rather heavy handed with its discount factors. Should the court ruling go in GKP’s favour, the company will have clear title to all assets and be free from any self inflicted news embargo’s. Furthermore, with the so at 2010 lows, the company would effectively be coming out of the traps like a ‘hare’ at a dog track.

The court hearing is expected around June time and one would expect the market to adjust the risk vs reward ratio to fairer levels as that date approaches. With the stock trading at 190′s on average for much of 2013, the current price of 130p presents a 50% upside for any new investor.

With the markets in current dual trading mode – there is no contest amongst the smaller caps and larger caps. The latter are clear winners. That said – there is no escaping the performance by the Independent which has delivered some major gains over the last 2 years. Great performance.

Current standings / Week 19 Results

1. The Independent 2013 +32.73% (weekly gain of 2.45%)
2. TheShareHub’s 2013 B-List +5.92% (weekly gain of 2.84%)
3. The LSE BB List 2013 -8.02% (weekly loss of 1.41%)
4. TheShareHub’s 2013 Hotlist -11.14% (weekly loss of 2.09%)

Click on Portfolio image to enlarge

05.13.2013 // Leave a comment // Continue Reading »

2013 Hotlist Results – Week 18

Written by HUB May 07, 2013

Week 18 of 2013

More of the same in week 18. The larger cap indices such as DOW, FTSE and S&P all performed well with the US markets continuing to break the history books with every trading day completed. You really have to pinch yourself when you see the S&P 500 at 1600+ and the DOW over 15000. The Markets waited patiently for the ECB and FED to deliver their policy decisions and both delivered exactly what the markets wanted. The rate reduction from the ECB really does sum up the current situation. Growth is virtually non existent and whilst the banks seem to be doing ok (major profits are back again) with washing the money through the system – the man and women on the street have yet to see any benefits. Until they do – the recovery will still be a long way off.

Earnings season for Q1 numbers is almost over – which will bring with it a little window of non news on a company specific basis for many stocks. That can often result in a drop of interest which is normally exploited by some market force. The sell in May mantra and don’t come back until St Ledgers day, has proven to be true (partly) but dips have been short lived and last year was a good example of the power that stimulus measures can have upon summer trading. This year may be no different but ask anyone if they would prefer a little pullback to cheaper levels – and most would say… yes please.

As for commodities and the resource sector – it’s beginning to look too cheap now. Whilst there’s still no need for the QE3 flooded traders to stretch themselves into the higher risk sectors – some are and will be building positions.

When will commodities bounce back? Well, if China can deliver some nice numbers in the future, then enthusiasm will begin to grow again. For the moment, M&A and some transformational discoveries wouldn’t go a miss to get the flames firing again.

The Dow closed week 18 up 60pts at 14973. The FTSE 100 added 104pts to close the week at 6522.

Week 18 stock picks summary:

Pretty much a re-run of last week as the larger caps continue to plough on higher while the smaller cap resource stocks drop lower. I don’t think i’ve eve seen such a different dynamic between sectors for a decade or so. Even when the larger caps are doing well, the small caps normally get to join in on the party even if it’s just minor gains. In most cases post 2009, it was the smaller caps that were the more lively. Always moving in more volatile patterns with greater swings between gains and losses notched up along the way. But recent action reflects more of a ‘squeeze’ on investors/traders some over leveraged and others over invested. As each investor gets forced to close positions or move cash else where to safety – the trend simply continues. That said – a reshuffle or review of ones portfolio/investments is never a bad thing at all and should be encouraged in these more volatile times. Unfortunately the stock picks for 2013 cannot be shuffled around as they are fixed for 12 months and figures represented based on not being traded.

There are many cheap stocks out there now in the resource sector – some look ridiculously cheap. Gulf Keystone is a prime example. Trading at 134p, the stock should be set for a major rerating once a court judgment is passed – expected as early as June but could be as late as July. To more seasonal investors (been around the block) you know when a stock is getting ready to break from a downtrend and head north – when you see and read plenty of ‘basher’ comments on bulletin boards. These types of posters like to spread doom and gloom and they tend to work hardest when they are losing the battle.

GKP is certainly not without risk, but at 134p, there’s a 1 bagger to 260p+ waiting should the court case go in their favour and that’s just for starters. With clean title on assets, many would expect a sale shortly after. Last year the stock hit 450p+ based on rumours of Exxon making a bid.

In this market where the resource sector is very much unloved – GKP potentially offers investors ‘transformational’ news without the drill bit but with the wig and hammer.

Also worth noting is that at the end of May, GKP are at the Kurdistan STEAM conference which could in itself deliver some much needed clarity on Turkish deals and political progress.

The Independent top picks are streets ahead with a 30% gain for 2013 already. Compare this to the small cap focused LSE and Hotlist picks and the disconnect is clear for all to see.

The gap will close but at present it’s difficult to call just when. But one does get the feeling that the disconnect is beginning to look a tad overdone.

Current standings / Week 18 Results

1. The Independent 2013 +30.28% (weekly gain of 0.65%)
2. TheShareHub’s 2013 B-List +3.08% (weekly loss of 0.63%)
3. The LSE BB List 2013 -6.61% (weekly gain of 1.10%)
4. TheShareHub’s 2013 Hotlist -9.05% (weekly loss of 0.89%)

Click on Portfolio image to enlarge

05.07.2013 // Leave a comment // Continue Reading »

CEO of Gulf Keystone breaks silence – provides update

Written by HUB May 02, 2013

The last time Todd Kozel communicated directly with shareholders via an RNS was back in 2012 – Nov 8th to be precise. It’s been almost half a year since the Chairman and CEO has uttered a word. The only time shareholders did hear from him – was when he announced a 1 million share sale in March. The second time was when he announced a 10mln share transfer which was apparently a ‘repayment’ based on some kind of unknown financial transaction.

It’s not surprising that perhaps the noises across the blogs and bulletin boards is that the CEO has lost touch with his loyal and long time enduring private investor base. Based on today’s notification of an AGM to be held in Bermuda – one has to assume that the CEO and Chairman has decided to distance himself further from the pi base.

Last year’s AGM was held in Paris and attended by many devoted shareholders. After many had travelled literally thousands of miles to be at the AGM – most left disappointed as the CEO elected to take all questions from shareholders and denied other board members from being included in the Q&A session. Over protective? Or just keen to ‘manage’ the situation as best a CEO can..?

The backdrop to a great deal of this shareholder discord and the CEO’s overly protective stance stems from the ongoing 3rd party litigation case which ended in March with judgement cited for 90 days at the earliest. Could be June or even July. Looking at past RNS’s – it’s clear that GKP decided it best to keep quiet on the operational front while the CC was underway.

That said – silence was broken by the COO in an operational RNS dated Feb 2oth, 2013.

In that RNS, GKP said the following:

“All equipment modules have now been delivered from Calgary, Canada through the port of Mirsin in Turkey and assembly work on the first Shaikan production facility (PF-1) is nearing completion… Shaikan PF-1 will become operational in March 2013.” END.

and

“The Company plans to spud Shaikan-10, the first development well, and Shaikan-7, the first deep exploration well, targeting the mid to lower Triassic and, potentially, Permian horizons, by the end of Q1 2013. Shaikan-10 will be drilled with the Weatherford 842 rig and Shaikan-7 with the Weatherford 319 rig.” END.

Nearly 3 months on from the above RNS (that’s 25% of the year by the way) the company announced this today…

“Following approval of the Shaikan FDP, Gulf Keystone will be ready to step up its production operations through the commissioning of two new production facilities at Shaikan (“PF-1 and PF-2″). The Company is planning to complete mechanical assembly and connection works on the Shaikan PF-1 by the end of Q2 2013, which will be followed by a period of start-up, commissioning and ramping-up of production to a target of 20,000 bopd, increasing to a capacity of 40,000 bopd in the coming months following the commissioning of the Shaikan PF-2.” END.

So based on the above – the company appears to have made very little progress on PF-1. Apparently it “will become operational in March 2013″. Nope. That’s not happened. It’s now apparently operational by end of Q2. Considering the assembly work/equipment modules were with the company sometime ago – it’s a wonder what they’ve been doing for the last 3 months?

There are more glaring ‘missed’ or delayed operational issues that could be picked up on but there’s little point in tearing the business apart. Delays happen – it’s the nature of the Oil&Gas business. So it’s fair to cut some slack from time to time. But before we ‘gloss’ over the delays – lets just relook at the above wording again…

Here’s the key paragraph worth noting…

Note the caveat “Following approval of the Shaikan FDP”. Mmm. So there we have it. That’s the reason why the delays are in place. That’s the reason why GKP appear to be twiddling their thumbs and passing 3 months by.

The FDP was apparently submitted to the KRG in January 2013. It’s now May 2013.

But you’ll be hard pushed to find GKP quoting the KRG in this recent RNS. Quite the opposite – they say…”The Company is in constructive talks with the appropriate regulatory authorities concerning their feedback on the proposed way forward for the development of the Shaikan field… and mention a “Shaikan Block Management Committee” as being the decision makers.

So in a nut shell, GKP’s production facilities appear to be held back due to the KRG (sorry – I meant…Shaikan Block Management Committee) deliberating on the FDP.

Shaikan is cited as a major development project. It has the potential to deliver over 30% of the KRG’s near term to medium term production targets. It’s clearly crucial to the KRG’s plans going forwards. The problem for GKP is that they are asset rich but cash poor. GKP simply do not have the funding ability to satisfy even the most straight forward of FDP’s. With no cash flow / production to self fund the project (at present) it makes it pretty hard for all involved to pass the FDP.

Something has to give. Otherwise the FDP approval might not be coming anytime soon.

There’s plenty under way via talks with Turkey which suggests exports might be around the corner. There’s also the CC judgement due soon too. The latter could see 30% of GKP go to another party. Whilst to many that seems very unlikely – I suspect to the KRG or Shaikan Block Management Committee might prefer to await the final judgement before approving an FDP based on GKP owning their current % holding.

There’s no doubt about it – the Court case has done immense damage to GKP, the CEO and Kurdistan progress. Some might say it’s just a dent and the damage will be long forgotten once the CC Judgement is passed and fingers crossed – goes in GKP’s favour. That’s probably true in terms of the bigger picture – but ask any shareholder if they would have preferred settling the case 12months ago for xx million and most would not think for more than a second before giving you an absolute ‘yes’.

If/when the judgement does come in GKP’s favour, it will feel like a victory. But in reality, the battle was lost long ago and there’s plenty of pi’s that have damaged portfolio’s/equity values to testify to that.

There is light at the end of the tunnel though – and that’s the curious thing. GKP are probably closer to having a genuine takeover or farm out deal than ever before in their entire history. If a predator fancies having a dart at GKP – then it’s better now rather than later.

In a few weeks time, GKP could have clean title on all assets, FDP approved and Production underway. And that can happen pretty fast indeed.

On July 1st 2012 – the sp was also near the 140′s level. It took just 3 days before it was testing 224p. When the tide turns – it normally is pretty fast. Incidentally, July 4th 2013 is when GKP are holding a London investor meeting. What’s the betting the shareprice is not far off 2012′s comparable levels by then?

At 132p today – GKP looks a great buy and that’s with all the risks that come with it.

Thesharehub near term share price target is 265p+ for July. That’s 100% above today’s closing price.

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2 May 2013

Gulf Keystone Petroleum Ltd. (AIM: GKP)

Gulf Keystone set for Significant Production Growth

Gulf Keystone, a leading independent E&P operator in the Kurdistan Region of Iraq, is pleased to provide an update on its four blocks in the Kurdistan Region of Iraq, including the world class discoveries at Shaikan and Sheikh Adi, as well as Akri-Bijeel and Ber Bahr.

Background

With the Shaikan commercial discovery alone, Gulf Keystone has one of the world’s largest onshore conventional oil & gas developments with a Pmean 13.7 billion barrels of gross oil-in-place as set out by Dynamic Global Advisors, independent Houston-based exploration consultants. A recent report by Goldman Sachs highlights the scale of the Shaikan development and the fact that in 2015 the global production increase will in part come from the Shaikan field*. The Company continues to be highly active with the drill bit, in order to further prove the value of its blocks.

Today Gulf Keystone is on the verge of moving into a phase of significant production, with the capacity to produce up to 40,000 barrels of oil per day (“bopd”) from Shaikan in the coming months and up to 400,000 bopd in the coming years. The Company will be a key contributor in meeting the Kurdistan Regional Government’s oil production targets of 1 million bopd in 2015 and 2 million bopd by 2019.

Considerable progress is being made on the regional pipeline infrastructure development and the Company’s increasing production will be matched by the available export capacity. The size and quality of the Company’s fields is now increasingly recognised and a number of the world’s largest oil companies, including ExxonMobil, Chevron and Total, are now following Gulf Keystone’s lead and commencing active work programmes in the Kurdistan Region of Iraq.

*Goldman Sachs: April 12, 2013 – “380 projects to change the world. From resource constraint to infrastructure constraint”

Commenting on today’s announcement, Todd Kozel, Executive Chairman and CEO, said:

“As one of the first companies to see the potential of the region, over the last five years Gulf Keystone has drilled or participated in nearly 20 wells and remains one of the most active operators in the Kurdistan Region of Iraq. Shaikan is the largest onshore development worldwide today not in the hands of a major operator. However, we believe that we have only scratched the surface of the true value of our blocks and our ongoing exploration and appraisal activity is expected to result in further upside.”

“The Company is encouraged by recent reports from a variety of sources, including political spokespersons, regarding the close and burgeoning ties between the Kurdistan Region of Iraq and Turkey, which the Company believes presents further transformational progress for the region. In this context, Gulf Keystone will play a major role as a co-host of the 2nd International Energy Arena Conference in Erbil on 30 May, a meeting place for key political and industry decision makers on the energy cooperation between the Kurdistan Region of Iraq and Turkey.”

“I therefore strongly believe that there is considerable momentum in the development of Kurdistan’s vast natural resources and Gulf Keystone is in a prime position to benefit as the region moves to this next stage.”

“Our remarkable journey continues and I remain indebted to our hosts in the Kurdistan Regional Government and to the outstanding team within our Company. We have never been more excited about the future.”

Highlights

Production & Development

– Significant operational progress made in the last 3.5 years between the Shaikan-1 discovery in 2009 and the submission of the Shaikan Field Development Plan (“FDP”) in early 2013, which is currently being reviewed by regulatory authorities

   --      Two new production facilities at Shaikan (PF-1 & PF-2) nearing completion 
   --      2013 production capacity of 40,000 bopd, expected to increase to 150,000 bopd in  2015

Infrastructure

– Gulf Keystone’s ramp up in production fully aligned with the region’s ongoing infrastructure development

– Alternative transport options exist for Gulf Keystone’s crude whilst the Shaikan pipeline is constructed, including the ability to truck and accessing growing pipeline infrastructure, including a planned oil pipeline with initial capacity of 300,000 bopd to the Fishkabur pump station on the border with Turkey expected to complete in 2013

Exploration & Appraisal

– Extensive drilling campaign continues with the Company’s 18th and 19th wells: Shaikan-7 deep exploration well & Shaikan-10 development well to spud in Q2 2013

– Following recent success of the Sheikh Adi-2 well, appraisal drilling is planned for the 1.9 billion barrel Sheikh Adi field (independently audited P50 gross oil-in place estimate), as well as further exploration work on the block

– Extensive exploration and appraisal programme is ongoing on the Akri-Bijeel block with two discoveries, Bijell-1 and Bakrman-1, made to date

Financial

– Fully funded for the 2013 work programme and aiming to achieve additional revenues through significant production growth

Corporate

– The Company will play a major role at the 2nd International Energy Arena Conference co-hosted by The Strategic Technical Economic Research Center (STEAM) and Gulf Keystone. Todd Kozel will participate in the Mapping the Future session led by the Minister of Natural Resources of KRG, H.E Dr. Ashti Hawrami and the Minister of Energy and Natural Resources of Turkey, H.E Taner Yildiz. The Prime Minister of the Kurdistan Regional Government, H.E Nechirvan Barzani, will also be in attendance. The conference will be held in Erbil on 30 May 2013.

Operational Update

Shaikan Field Development Plan

On 27 January 2013, Gulf Keystone, as operator, submitted a Field Development Plan (“FDP”) to the Shaikan Block Management Committee. The Company is in constructive talks with the appropriate regulatory authorities concerning their feedback on the proposed way forward for the development of the Shaikan field, which was declared a major commercial discovery in August 2012.

Shaikan PF-1 and PF-2

Following approval of the Shaikan FDP, Gulf Keystone will be ready to step up its production operations through the commissioning of two new production facilities at Shaikan (“PF-1 and PF-2″). The Company is planning to complete mechanical assembly and connection works on the Shaikan PF-1 by the end of Q2 2013, which will be followed by a period of start-up, commissioning and ramping-up of production to a target of 20,000 bopd, increasing to a capacity of 40,000 bopd in the coming months following the commissioning of the Shaikan PF-2.

Delivery of equipment modules for the Shaikan PF-2 is progressing and the construction of the Shaikan PF-2 site has been completed. The assembly works will commence following the completion of the Shaikan PF-1.

Shaikan-7 and Shaikan-10

The Company plans to spud Shaikan-7, the first deep exploration well, targeting the mid to lower Triassic and, potentially, Permian horizons, and Shaikan-10, the first development well, in May and June 2013 respectively.

Akri-Bijeel Block

Extensive exploration and appraisal programme is ongoing on the Akri-Bijeel block. The Bakrman-1 exploration well testing programme is nearing completion and the Bijell-2 and Bijell-7 wells are being drilled to appraise further the Bijell discovery. The construction of an Extended Well Test facility for the Bijell discovery is nearing completion.

Ber Bahr Block

Re-testing of the Ber Bahr-1 exploration well continues.

Sheikh Adi Appraisal Programme

After making a Jurassic discovery with the Sheikh Adi-2 exploration well in November 2012, the Company and the Kurdistan Regional Government, its partner in the block unanimously agreed to move to an appraisal programme to appraise Jurassic targets and evaluate the Triassic upside at the 3,500 metres projected depth with the Sheikh Adi-3 appraisal well. Furthermore, we plan to target two additional exploration leads, comprising potential extensions of the Atrush and Swara Tika discoveries, following acquisition of 70 km of additional 2D seismic data. The Company is enthusiastic about the forthcoming appraisal and additional exploration work as it is the Company’s belief that the Shaikan field shows signs of a significant extension into the Sheikh Adi block.

Full Year Results, Investor Day & AGM

The Company will announce full year results for the period ended 31 December 2012 on Thursday, 20 June 2013. The Company will hold an Investor Day on Thursday, 4 July 2013 in London. The Company’s Annual General Meeting is to be held on Thursday, 25 July 2013 in Bermuda.

05.02.2013 // Leave a comment // Continue Reading »

Max Petroleum Plc – Operational Update

Written by HUB May 01, 2013

An excellent ops update from MXP this morning and it has to be said – quite overdue.

It wasn’t that long ago that I was having a dig at management for not adding some meat on the bones that have been thrown in the guise of recent development wells news/RNS’s.

Today – the detail and guidance is there for all to see and it makes good reading.

While high impact exploration still rests firmly on their ability to see NUR-1 complete – getting the house in order, cash flow moving and the basics done well is very much what 2013 is all about.

If all goes well, then the platform should be set for a more exciting exploration phase in 2014.

Investors will be pleased to see production boosted and the company back to solid foundations.

With China pipelines under way in Kazakhstan, the region is seeing a new demand/interest from the majors. Finding a partner for NUR-1 should not be a problem but MXP need to strengthen their foundations before being able to horsetrade their way to a smart deal.

………………………………………………………….

01 May 2013, Max Petroleum Plc

Operational Update

Max Petroleum Plc, an oil and gas exploration and production company focused on Kazakhstan, is pleased to announce a drilling and operational update regarding its activities in the Blocks A&E Licence in Western Kazakhstan (the “Licence”).

Zhana Makat Field

The ZMA-E5 development well in the Zhana Makat Field has successfully reached a total depth of 871 metres, encountering hydrocarbons in Jurassic sandstone reservoirs in line with expectations. The Company plans to complete the well and then place it on production as soon as practicable. The Zhanros ZJ-20 rig will now move to drill the ZMA-E6 development well in the Zhana Makat Field before moving to Block A to drill the Uytas North Prospect, targeting resource potential of 11 million barrels of oil (“mmbo”) with a current geological chance of success of 24%.

Baichonas West Field

The Company has spudded the BCHW-2 well, the first appraisal well in the Baichonas West Field, which was discovered in September 2012. The initial results of logging and production testing of the BCHW-1 well indicated a commercial discovery with oil in place of approximately 16 mmbo from Jurassic reservoirs with an expected recovery factor of between 20% and 40%. The BCHW-2 well will be drilled with a ZJ-30 rig from our drilling contractor Zhanros Drilling LLP, to a depth of approximately 1,400 metres.

Sagiz West Field

After drilling the BCHW-2 well, the Company will move the ZJ-30 rig to drill the SAGW-4 appraisal well in the Sagiz West Field. Preliminary mapping of recently acquired high-fold 3D seismic data has confirmed the location of SAGW-4, four km south of the SAGW-3 well, as prospective. If successful, the new well will substantially extend the known productive area of the field. The results of the SAGW-4 well, together with the new seismic data, will be crucial in evaluating a significant portion of the 79.8 mmbo of in-place contingent resources in the field, as well as assisting the Company in the design of the future appraisal and development plan for the field.

Uytas Field

The Company is currently tendering for a third shallow drilling rig to conduct a 13-well appraisal programme for the Uytas Field. These wells, which will vary in depth between 200 and 550 metres, will appraise a significant portion of the 27.2 mmbo of conventional in-place contingent resource potential in the field and assist in preparation of a full-scale development plan.

Production Update

Total production during the fiscal year ended 31 March 2013 averaged 3,346 barrels of oil per day (“bopd”), an increase of approximately 19% from average production of 2,807 bopd in the prior year. This increase is in line with the Company’s guidance that production would average between 3,200 and 3,600 during this period. For the current fiscal year ending 31 March 2014, it is expected that production will average between 4,500 and 6,000 bopd.

Regulatory Update

The Ministry of Oil and Gas of the Republic of Kazakhstan (“MOG”) has progressed the final ratification of the two-year extension of the exploration period of the Company’s Licence (the “Appraisal Extension”), which is now expected in May 2013. The approval of the Appraisal Extension is the single remaining requirement for the Company to convert the Asanketken Field to trial production status and resume continuous production from all four wells in the field in order to gather the required technical data to progress Asanketken to full field development status during 2014. The Company has already received a gas flaring permit for the field and expects to resume production during May 2013 with a combined productive capacity in excess of 2,000 bopd from the Asanketken wells.

Michael Young, President and CFO, commented:

“It is positive to have two drilling rigs in operation with a third coming into play in the near future. The near term drilling programme will allow us to further evaluate Baichonas West, Sagiz West and Uytas, as well as test the Uytas North Prospect. These are all important milestones in this year’s post-salt drilling programme, with the results of the SAGW-4 well being the most significant. Moving Asanketken onto trial production will also add a substantial boost to our current production rate of 2,200 bopd from Zhana Makat.”

05.01.2013 // Leave a comment // Continue Reading »

Ophir blows away estimates with MZIA-2 DST

Written by HUB May 01, 2013

Not much more one can say regarding this DST. Simply amazing.

Considering the company was already hampered by tools that were not up to handling high flow rates – the results really are impressive.

The commercial story just got a massive boost and for Tanzania – the country looks set for a huge future in the Oil&Gas industry.

…………………………………………………………………………..

RNS Number : 6737D, Ophir Energy Plc

01 May 2013

Tanzania Block 1: Drill Stem Test Confirms Excellent Flow Rate, Reservoir Quality and Increased Recoverable Resources in the Mzia Field.

London, 1st May 2013: Ophir Energy plc (“Ophir” or “the Company”) announces the successful Mzia-2 Drill Stem Test (DST), Block 1 Tanzania.

The Mzia-2 appraisal well was drilled earlier in February 2013, confirming an estimated 62m of net gas pay in Cretaceous reservoirs, establishing pressure communication between the Mzia-2 and Mzia-1 gas columns, and determining a vertical gas column of at least 200m for the Mzia Field.

The Mzia DST was designed to be the first test of Cretaceous age reservoirs in the Tanzanian deepwater play. Ophir management had previously estimated that a threshold flow test rate of 10-20 mmscf/d would be required to confirm the commerciality of future production wells from this asset. On test, the Mzia-2 DST flow-rate was at the very upper limit of the expected range. The 60 hour main flow period flowed at the maximum equipment limited rate of 57mmscf/d with a low drawdown (<600psi). Successful completion of the Mzia-2 appraisal programme has validated the resource potential of the field and confirmed that excellent development well productivity may be expected.

The DST results suggest that the reservoir parameters that had previously been used to calculate recoverable volumes in the Cretaceous reservoirs were conservative. Although further appraisal drilling will likely be required to determine the total recoverable resource of this extensive field, Ophir management now estimates that mean recoverable resources from the Mzia Field have increased 22% from 3.5 TCF to an estimated 4.5 TCF.

The Deep Sea Metro 1 drillship is now spudding the Ngisi-1 exploration well in Block 4. Ngisi-1 is designed with two deviated well paths; to test separate compartments of the Ngisi Prospect and the deeper Chewa Discovery. Ophir estimates Ngisi-1 could increase the mean in-place resource of the Chewa-Pweza-Ngisi hub to 5.8 TCF in place, (4.1 TCF mean recoverable) and will provide critical scale for gas aggregation and development from Block 4.

Ophir holds 40% of Blocks 1, 3 and 4 in Tanzania and operator BG Group holds 60%.

Nick Cooper, CEO, commented:

“The recent Jodari flow test demonstrated the excellent reservoir deliverability potential of the younger Tertiary reservoirs in Tanzania. This Mzia flow test is a landmark result as the first time that the older, Cretaceous reservoir has been flow tested in Tanzania. By flowing at an equipment-constrained 57 mmscf/d the Mzia Field has significantly exceeded our expectations.

The Mzia-2 DST result has increased estimated recoverable resources from the field to an estimated 4.5 TCF. This flow test result will boost expected production rates and improve development economics for this asset. With this better than expected reservoir performance in the Cretaceous, the Ophir-BG JV will reassess the potential of both the earlier Papa-1 discovery and the remaining prospects of similar Cretaceous age.

This is another important step forward in Tanzania’s first LNG development project and illustrates the potential for further considerable upside in our acreage in Tanzania.”

05.01.2013 // Leave a comment // Continue Reading »

2013 Hotlist Results – Week 17

Written by HUB April 29, 2013

Week 17 of 2013

Earnings season continues to deliver solid numbers across many sectors suggesting that the slosh of QE3 cash is working. However, growth is still weak and Job creation slow. There’s not a great deal to add as most equities are doing brilliantly. I say most – as the QE3 cash is not making its way through to the commodity stocks or smaller caps.

Higher risk stocks are still being shunned while the market continues to enjoy very handsome returns on the lower risk sectors. Like low hanging fruit, why try and pick the difficult stuff when there’s plenty to eat for all at eye level?

There will come a point (as invariably there is always a turning point in any trend) when the blue chips /large caps cannot take any more waffles like Mr Creosote? A rotation from large caps to small caps or higher risk commodity stocks would be the perfect jump to make. From one bubble to one oversold sector. What a perfect scenario. Of course it doesn’t always work that way, but when QE3 begins to dry up, the markets have to make their cash work that much higher to gain the returns that their clients demand.

Some Solid figures from China in the future would go a long way to supporting commodities in the latter part of this year. Further declines on GDP will continue to place pressure on metals, oil and gas as demand weakens.

The Dow closed week 17 up 165pts at 14713. The FTSE 100 added 139pts to a close the week at 6426.

Week 17 stock picks summary:

The ‘dual market’ continues as Blue chips soak up the free QE3 cash and the higher risk AIM small caps drift on lack of interest and in some cases poor exploration results. But it’s not just the operational activity that investors have to keep their eyes on. Directors personal preferences to manage their tax affairs through share sales – often on shares that have been awarded as bonuses etc – can wipe millions off the market cap if accompanied by a weak and unclear RNS. Which is precisely what happened to GKP this week. The CEO and GKP’s advisors who between them are charged with ‘taking care of the company OWNED by shareholders’ dropped a rather open ended RNS into the market akin to a hand grenade. An ill advised move and one that required more delicate hands.

The Independent continues to soar and based on 2012 and 2013 has returned over 100% gains across their picks. It puts in context just how far the blue chips have come over the last 18months.

The only hope for the small cap focussed top picks is to see some exploration success. The transformational sort can deliver multi-baggers but success stories are hard to find at present. But it only takes one big success to get the interest sparked again. Success on the Exxon / PVR Dunquin drill would certainly herald a new exploration frenzy off the west coast of Ireland. Fingers crossed!

M&A is another great catalyst. A bid from a major for Bowleven, GKP or Ophir etc would add some spice to a sector that is looking very cheap on a resource basis at a time when the majors are seeing reserves decline.

Current standings / Week 17 Results

1. The Independent 2013 +29.83% (weekly gain of 5.30%)
2. TheShareHub’s 2013 B-List +3.75% (weekly gain of 1.23%)
3. The LSE BB List 2013 -7.71% (weekly loss of 5.91%)
4. TheShareHub’s 2013 Hotlist -8.16% (weekly loss of 3.71%)